The PWA (macro) Index
scored 42.86, for its 5th straight weekly decline. Last week’s weakness was
concentrated in the Financial Markets subindex with the VIX curve and the
put/call ratio moving from bullish to neutral (denoting heightened risk-off sentiment).

The General Economy
and Financial Stress subindexes both came in unchanged for the week.

In terms of valuation,
the S&P 500 looks reasonably valued, with tech
pushing the higher end of our fairly-valued range, while financials remain
notably undervalued. Non-US equities remain cheap virtually across the board.

Summary:

While, clearly,
general conditions have waned a bit relative to the beginning of the year, the U.S.
economy remains strong.

The odds of global
recession remain low, however, we are seeing a more (than in the U.S.) rapid waning of conditions
-- in the aggregate -- outside of the U.S..

Given the global
nature of business in the 21st Century, the seemingly popular notion (in some circles) of late that a weakening
of conditions in other countries (especially China) somehow indicates that the
U.S. is winning on the trade front, or that we are immune to negative global
forces, is a faulty, and dangerous, opinion to hold -- to say the least!

Our view remains that
the political (career) devastation that would befall the perpetrators of a protracted
global trade war will ultimately inspire better thinking/acting. That said, the
current negative trajectory of general conditions (5 consecutive weekly declines in our macro index) has our attention; if the
powers that be wait too long to begin acting sensibly we could be facing
recessionary conditions such that a trade truce would not avert a significant
economic downturn.

As for the
moment, conditions continue to suggest that we're in expansion and bull market mode. However, per
the above, we're keeping a very close eye on what, in the immediate-term, looks to be a somewhat less robust global macro
environment...